Some Anatomy of Job Creation: The Role of Firm Size,Age,and the Nature of Opening

In this paper firm-level data on British regional policy instruments are used to examine the role of different forms of assistance and the characteristics of recipient establishments in determining the time profile of assisted employment up to five years after the date of receiving aid. The establishment characteristics considered are the number of employees, age, and, in the case of new establishments, the nature of the opening, be it a new firm, a new branch plant, or a relocated firm. The central result to emerge is that assistance in the form of discretionary project grants and rent relief to new factory tenants has significant employment effects in new and recently established small firms, but that assistance which is either in the form of an automatic capital grant or made to other types of establishment has a weak employment effect which is barely significant after three years.